Samsung ups five-year capex to $356 bn for chip, bio and AI leadership

[Photo by Yonhap]

South Korea’s Samsung Group pledged 450 trillion won ($356 billion) in chip, bio, and IT sector over the next five years, of which 80 percent would go to facility and R&D investment, by nearly doubling its mid-term capex goal from last year to cement its global leadership amid fast changing international supply order and economic environment.

Under the new investment outline to ready “Samsung’s future for dynamic innovation growth” released by flagship Samsung Electronics Tuesday, the bulk would go to enhancing the chipmaker’s system memory and foundry capacity.

It will spend 360 trillion won at home to create 80,000 jobs, sharply increased from last year’s pledge of 240 trillion won for following three years of which 180 was devoted to home turf for 40,000 jobs soon after group’s de factor chief and Samsung Electronics Vice Chairman Jay Y. Lee was released from prison on parole in August.

Over the last five years, the group had invested 330 trillion won.

Predicting the next five years to be “the inflection point” for the Korean economy, Samsung will execute bold investment to contribute to “the economy’s new leap” and add vitality to the society, according to the press statement.

On the memory front, Samsung will preemptively apply EUV technology to ensure its lead against growing challenges from U.S. and Chinese players. Samsung Electronics made up 43.9 percent of the global DRAM shipments as of the third quarter of 2021.

On system chips where Samsung Electronics has been lagging despite fast expanding market, it will invest to enhance competitiveness in high-performance and power-saving application processors and 5G/6G power chips. In high-definition image sensors, where Samsung is behind an estimated market share of 24.9 percent, it hopes to narrow the gap with No. 1 commanding market share of more than 40 percent.

Foundry would be the centerpiece of its focus “as becoming No.1 in consigned chip production would be tantamount to adding another company as big as Samsung Electronics in the country.”

It will advance the migration to under 3-nanometer processing to draw orders for high-performance chips.

Samsung Electronics which showed off a prototype of the world’s first chip from 3-nano processing to U.S. President Joe Biden last Friday is mass producing the chips within the first half.

Samsung Group will groom bio to its chip-like rank, it said.

It will build the fifth factory for Samsung BioLogics after completing the fourth plant to cement its leadership in consigned drug manufacturing.

Artificial intelligence and 6G would also be center of investment for the next five years.

The bold capex however failed to uplift shares of Samsung Electronics. They ended Tuesday 2.06 percent down at 66,500 won.

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